THE Governor of the Central Bank has said the Financial Regulator should always be an "outsider", removed from Ireland, who is not connected with the key players in the banking industry.

This enables the regulator to sustain criticism in Ireland but maintain his credibility abroad, making it straightforward to move on in future, Patrick Honohan said.

Addressing an audience in London this week, the governor said the appointment of his deputy Matthew Elderfield to the position was ideal in that he is an outsider from the Irish financial world, having worked in Bermuda, the UK and the United States.

"In Ireland we appointed my deputy, an outsider, an Englishman brought up in the United States -- consistent with my model," Mr Honohan told an audience in the Cass Business School in City University London.

"He (the regulator) sort of says, 'Who is this guy (banker)?' You don't even know who this guy is? That is great, the regulator shouldn't know the guy and his family."

His comments came during a series of engagements in the City of London where Mr Honohan briefed figures from the financial markets about Ireland and regulation.

When questioned on whether he thought European financial supervisors would be better than locals, he said outsiders were better for the job and Europe allows for these people to take the roles.

"I think it is much easier for the foreigner to accept . . . grief because it is saying you know 'I am here, I am suffering some grief but my reputation internationally is high and I can move from here to something else and I am not beholden'.

"It is much easier for him to do it than an Irish person to blow the whistle on a plutocrat," Mr Honohan said.

Speaking about the upcoming referendum on the fiscal stability treaty, the Governor said he did not believe that it would be rejected.

The 'No' campaign are "not all that numerous" he told the audience and most were speaking out against austerity measures instead of engaging in euroscepticism.

He referred a number of times to the arrival of the troika -- the EU, ECB and IMF -- and the ensuing changes in spending and taxation.

"Since the troika arrived, the glide path for fiscal adjustment has been very gradual," he said.

"Without the troika, it would have been a crash landing so it is not clear that there is a coherent opposition to fiscal adjustment."

Earlier, he had told an audience from the financial markets that without the troika, the financial adjustments would have been "much more severe".

Mr Honohan praised the EU's role in Ireland, saying the idea that it is a problem "does not ring through".

"It is unquestionable it has been a great strengthening, a great widening of horizons," he said.

However, the full scale of banking losses is not yet known by anyone, Mr Honohan said.

"We know the big numbers were put out there but I am not sure that we know whether they were too big or a little bit too small or just right," he said.

"I don't have a precise number for you and I don't think anybody else has either. It is not as if we found the drawer in which the value was written down."

Introduced as a man who is "in the unusual position of being a central banker who is quite popular in his own country", the Mr Honohan said the Central Bank aimed to focus on the losses to banks' mortgage books as a result of defaulted loans.

A gradual upturn in both employment and the economy is expected next year, he said.